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Transcript of Presentation by NEDA Arsenio Balisacan 9.2.13
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8/14/2019 Presentation by NEDA Arsenio Balisacan 9.2.13
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GETTING INCLUSIVE GROWTHAND COMPETITIVENESS RIGHT
ARSENIO M. BALISACAN
Socioeconomic Planning Secretary
National Economic and Development Authority
10th Management Association of the Philippines
Breakfast Dialogue with Pres. Aquino Cabinet2 September 2013
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I. Recent Economic Performance
II. The Development Challenge
III. Strategies to Sustain Growth and IncreaseCompetitiveness
IV. Prospects/Outlook and Target
Outline
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Recent Economic
Performance
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4.6%
3.2% 3.0%3.8%
6.5% 6.3%7.3% 7.1%
7.7% 7.5%
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
PHGDP
Growth
Rates
The Philippine economy has been growingrobustly.
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2012 2013
Q2
Real GDP
Growth
6.8% 7.5%
Agri, Fishery
and Forestry
2.8 (0.3)
Industry 6.8 10.3
Manufacturing 5.4 10.3
Services 7.6 7.4
Supply Side
11.1
32
22.1
56.9
9.4
32.7
21.8
57.9
0
10
20
30
40
50
60
70
Agri,Fishery
and
Forestry Industry Manufacturing Services
ShareinGDP(%)2012 2013Q2
Source:NSCB
GrowthRate(%)
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Demand Side
70.4
10.3
18.5
1.8 6.4
48.4 47.6
67
13.1 17.4
2.9 5.7
47.1 45.6
0
10
20
30
40
50
60
70
80
HouseholdFinal
Consumption
Gov'tFinalConsumption
CapitalFormation
PublicConstruction
PrivateConstruction
Exports Imports
ShareinGDP(%)2012 2013Q2
GrowthRate(%)
2012 2013
Q2
Household
Final
Consumption
6.6 5.2
Govt Final
Consumption
12.2 17.0
Capital
Formation
-3.2 13.2
Public
Construction
29.8 31.1
Private
Construction
11.5 9.0
Exports 8.9 (6.5)
Imports 5.3 (3.0)
Source:NSCB
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Sound macroeconomic fundamentals supportedthis remarkable performance.
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10
20
30
40
50
60
70
80
2005 2006 2007 2008 2009 2010 2011 2012 2013*
NGDebttoGDP,LHS FiscalBalancetoGDP,RHS
0.0
5.0
10.0
15.0
20.0
0.01.0
2.0
3.0
4.0
5.0
6.0
7.08.0
9.0
2005 2006 2007 2008 2009 2010 2011 2012
NPLRatio,LHS
Realinterestrates,RHS
CAR,RHS
Sustainable fiscal and external position
Low and Stable inflation Favorable interest rate and sound banking system
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2005 2006 2007 2008 2009 2010 2011 2012 2013*
HeadlineInflation
LowendTarget
*JanJuly2013
Note:HighandlowendtargetsarebasedonBSPpublicationonInflationTargetingdatedMarch2013;Actual
inflationfiguresarebasedon2006CPIseries.
* As of Q1 * As of Q1
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Global Competitiveness Index Report
Country 2012-2013GCI Ranking
2011-2012GCI Ranking
Singapore 2 2
Malaysia 25 21
Brunei 28 28
Thailand 38 39
Indonesia 50 46
Philippines 65 75
Vietnam 75 65
Cambodia 85 97
Source: Global Competitiveness Index 2012-2013, World Economic Forum
Our competitiveness ratings also increased
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The Development
Challenge
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Indicator Ave 2010 Ave 2012Ave 2012
(Jan &
Apr)
Ave 2013(Jan &
Apr)
Labor Force Level (000) 38,893 40,432 40,435 40,870
Employment Level (000) 36,035 37,607 37,587 37,880
Wage and salary workers (%
share to total employment)54.5 56.8 55.5 58.8
Unemployment Level (000) 2,859 2,825 2,848 2,990
Unemployment Rate (%) 7.3 7.0 7.0 7.3
Underemployment Level (000) 6,762 7,509 7,165 7,593
Underemployment Rate (%) 18.8 20.0 19.1 20.0
Source: Labor Force Survey, National Statistics Office
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Employment creation remains a big challenge
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More needs to be done to achieve inclusive growth.....
64.0
8.9
12.8
14.3
64.18.8
12.7
14.4
2011
2012
28.8 28.6 27.9
16.6
0
5
10
15
20
25
30
35
40
S12006 S12009 S12012 FY2015
FirstSemester
Poverty
Incidence
AmongPopulation(%)
RegNCR,IIIandIV
OtherLuzon
Visayas
Mindanao
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Overall
Rank
Customs Infrastructure International
Shipments
Logistics
qualityand
competence
Tracking
andTracing
Timeliness
Singapore 1 1 2 2 6 6 1
Malaysia 29 29 27 26 30 28 28Thailand 38 42 44 35 49 45 39
Philippines 52 67 62 56 39 39 69
Indonesia 59 75 85 57 62 52 42
Vietnam 53 63 72 39 82 47 38Cambodia 101 108 128 101 103 78 104
Laos 109 93 106 123 104 111 118
Myanmar 129 122 133 116 110 129 140
In terms of logistics, there is stil l more room forimprovement
Source: World Bank (Connecting to Complete: Trade Logistics in the Global Economy)
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Sustaining Growthand Improving
Competitiveness
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Good governance has proven to be an effective platform uponwhich strategies should be implemented.
Macroeconomic (fiscal, financial, external) and political
stability fuels positive expectations that lead to growth.
Economic growth is necessary but not sufficient for poverty
reduction.
Growth strategies need to have spatial and sectoral
dimensions to ensure inclusivity.
Disasters can negate the gains and even push back
development.
14
Lessons Learned:Midterm Assessment of PDP 2011-2016 Implementation
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Guiding Principles
Efficiency (catalytic; government intervention facilitates and
not substitutes for private action) Equity (broadening opportunities through connectivity, human
capital investments)
Feasibility (doable within the Plan period)
Desired Outcomes
Rapid increase in employment opportunities to
significantly reduce the stock of unemployed persons
Significant reduction in poverty incidence to come as
close as possible to the MDG
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POSITIVEACTIONwithSpatialandSectoral Dimensions
(e.g.,economicandsocialprograms)
Boost
competitiveness
Improveaccess
tofinancing
MacroeconomicStability(fiscal,monetary,external,financial)
Science,
technology,
innovation
Educationand
skillsetofthe
workforce
Infrastructure
Investments
Rapidandsustainedgrowth
jobs
Marketdemand
INCLUSIVEGROWTH(MASSIVEEMPLOYMENT
CREATION,REDUCEDPOVERTYINCIDENCE)GoodGovernance
(PropertyRights,
RegulatoryEfficiency,
Alignmentofpolicies)NationalSecurity,
and
EcologicalIntegrity
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We will do more to pursue inclusive growth...
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Infrastructure
Human capital
Governance
Sustaining growth and improve competitiveness
Maintain Macroeconomic stability
Investments in:
Infrastructure to GDP Ratio Share of Social Spending to
Total Budget1.Ensuring high quality public
service delivery;
2.Curbing corruption;
3.Strengthening the rule of law;
and,
4.Enhancing citizens access to
information and participation in
governance.
Governance Reforms/Strategies
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Positive Actions that consider sectoral andspatial dimensions
Infrastructure development focusing on connectivitybetween regions/provinces, esp. transport and power
New growth drivers outside NCR
(agri/agribusiness, tourism, IT/BPM in next wavecities, public housing, manufacturing, infra/logistics)
Investment in human capital to improve the
competitiveness/ productivity of current and future stockof the labor force
Provision of social protection against income and
employment shocks for the most vulnerable Improved resilience to natural disasters
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Source: PublicInvestmentProgramasofMay 31,2012
Achieving the Target ofP4.7 Trillion* Investment Plans
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Strategic Core Investment Projects 2013-2016
Source:HighlightsoftheRevalidated20112016PIPMay31,2013FirstDraft
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Source: NEDA Staff calculations; DBM (actual data)
* 2011 and 2012 are actual figures
1.6
2.4 2.6
3.0
4.1
5.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2011 2012 2013 2014 2015 2016
Infrastructure Development:Increase in NG infrastructure spending from 2.4% in2012 to 5% of GDP by 2016
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Prospects/Outlook
and Target
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2012 2013 Q2 2013 2014
Actual Actual Outlook Target
GDP 6.8 7.6 6.0-7.0 6.5-7.5
Agriculture 2.8 1.4 3.5-4.5 3.2-4.2
Industry 6.8 10.6 6.4-7.5 7.4-8.5
Services 7.6 7.1 6.3-7.3 6.7-7.6
Source:NEDAasapprovedintheDBCC
We strive to get growth going in 2013 and beyond
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Strong performance of agri-based manufacturing,
and recovery of semiconductor and electronics Robust public and private construction
Buoyant domestic and local tourism
Continued strong growth of wholesale and retail
trade
Real estate, particularly housing
Greater productivity in agriculture and rebound of
the fisheries subsector
Growth Drivers Supply Side
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Higher public construction and investments in
power generation Robust private investment in construction and
durable equipment
Strong household consumption due to betteremployment opportunities, strong remittance
inflows, and low and stable inflation
Increased tourist arrivals and more demand forbusiness process management
Improvement of external trade conditions
Growth Drivers Demand Side
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Weather disturbances (e.g., Typhoons, prolongedmonsoon rains)
Delays in the implementation of infrastructure
development projects, particularly power
Excessive capital inflows/outflows Uncertainty of economic recovery in the Euro area and
Japan
Tapering of monetary stimulus in the US Further economic slowdown in BRIC, particularly China
Possible spike in commodity prices (e.g., petroleum)
We also remain vigilant against the followingnear-term global and domestic risks to growth...
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*Luncintel,GlobalIndustrialApplicationPaperIndustry20122017:Trend,Profit,andForecastAnalysis
while taking advantage of opportunities
Improvement in the global economic environment
- Sustained consumption growth in emerging markets
Demographic transition
- Rising middle-income class, continued growth of working-age
population
Increased economic integration of ASEAN member countries
- Open flow of goods, services, labor, technology, finance
More financial resources available
- Fiscal space
- Investment credit-rating
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GETTING INCLUSIVE GROWTHAND COMPETITIVENESS RIGHT
ARSENIO M. BALISACAN
Socioeconomic Planning Secretary
National Economic and Development Authority
10th Management Association of the Philippines
Breakfast Dialogue with Pres. Aquino Cabinet
2 September 2013